The pact, the latest in a series of “mini” trade deals falsified by the Trump administration, follows seven months of negotiations between the United States and Brazil and is coming in as President Trump looks forward to winning trade profits before the November 3 election. But it is not known to what extent the new agreement will stimulate trade between countries, as it is limited. President Donald Trump has begun laying the groundwork for a new trade agreement with Brazil and removing all barriers to trade between the two countries. The announcement follows a series of other small trade deals announced by the Trump administration, including with Japan, China and the European Union. Unlike a comprehensive free trade agreement, these small agreements do not require congressional approval, which can put a deal on hold or collapse for many months. The Trump administration has also sought a limited trade deal with India, but has yet to reach an agreement. The government has not yet released details of the agreement with Brazil, but it appears even smaller than the agreements signed with China and Japan. It focuses on facilitating trade or harmonizing the methods used by the two governments to process goods crossing their borders, with the aim of facilitating trade between countries for businesses. It will also reduce regulatory barriers and strengthen rules to root out corruption. The new pact aims to remove trade barriers, strengthen regulation and fight corruption. U.S. trade in goods and services with Brazil totaled $105.1 billion in 2019. Exports totaled $67.4 billion; Imports totaled $37.6 billion.
The U.S. trade surplus with Brazil was $29.8 billion in 2019. Brazilian President Jair Bolsonaro said Monday at an event organized by the U.S. Chamber of Commerce that the agreement will “open a new chapter” in relations between the two countries. He said Brazilian and U.S. officials concluded the negotiations “in record time” on a package that would “reduce bureaucracy and increase our bilateral trade.” The U.S. trade surplus with Brazil was $12.0 billion in 2019, an increase of 46.6% ($3.8 billion) over 2018. The United States recorded a service surplus of $18 billion with Brazil in 2019, down 11.6% from 2018. In 2011, the United States and Brazil signed the Trade and Economic Cooperation Agreement to improve trade and investment cooperation between the two largest economies in the Western Hemisphere. The agreement expands our direct trade and investment relations by providing a framework for deepening cooperation on a number of issues of mutual interest, including innovation, trade facilitation and technical barriers to trade.
The new U.S. trade agreement with Brazil may not sound like the U.S.-Mexico-Canada (USMCA) agreement, but it will effectively boost trade between the two countries, analysts say. In 2018, the U.S. trade surplus with the South American country was $8.3 billion, an increase of 7.2% ($563 million) over 2017. The United States has an estimated $21 billion surplus in services with Brazil in 2018, 7.1% more than in 2017, according to the Office of the U.S. Trade Representative. The United States and Brazil signed a new protocol on trade rules and transparency and updated a 2011 agreement between the two countries, as announced by the U.S. Trade Representative`s Office on October 19. ATEC engages in a wide range of trade and investment issues.